POMS Production Operations Management Conference – San Francisco USA
April, 5-8, 2002
THE MANAGEMENT IN DEMOCRATIC AND SOLIDARY BASES:
DILEMMAS AND CHALLENGES
Sandra Rufino
Assistant Professor in the Engineering and Administration at Faculty of Engineering of São Paulo (FESP)
and Integrated Faculties of Rio Branco (FIRB)
Member of Technologic Incubator of Popular Cooperatives (ITCP-USP)
Graduate student in the Department of Production Engineering at Politécnica School, University of São
Paulo (PRO EPUSP)
ABSTRACT
The self-management firm in the base of cooperative principles could or should obligated rethinking the
methods and productive process to attempt to establish, also in relation to processes, democratic forms that
consider and are in accordance with administrative frameworks and policies of cooperatives. More
knowledge about the difficulties in this scope could appoint many important and certainly necessary courses
for reflection of this theme. Meanwhile, the solutions for this claim are not replied satisfactory, and yet are in
development stage.
KEYWORDS: Social Economic,
Management, Productive Process.
Self-Management,
Cooperatives,
Democratic
1. INTRODUCTION
The Social Economic movement has grown every day, in search to fetching options of
attainment of work and income. As a worldwide trend, it has become one of the main
forms of population’s reorganization. Social Economic configures itself as “a mode of
production and alternative (...), created and recreated distribution for that if they find (or
they fear to be) kept out of society of the work market. The Social Economic marries the
principle of unity between ownership and use of the means of production and distribution
with the principle of the socialization of these means". (SINGER, 2000). Synthetizing: it is
an economic organization, where solidarity predominates among workers in search of
democratic forms to make survival possible.
Inserted in the Social Economic, there are organizations on the basis of the selfmanagement companies, cooperatives or associations - for presentation effect, all these
forms will be called self-management companies - which are conducted by the principles
of cooperativism, having as one of its pillars democratic management, transparency and
collective decision. We can see through reports of entities and authors that selfmanagement companies have fortified more and more in Brazil (OCB, 2000; ANTEAG,
2000; SINGER, 2000). However, the problem persists: control the management or control
the means of production? Currently the given emphasis is in the control of management,
which is correct, therefore has been the problematic greater in the beginning of any
company based on self-management. In this transformed environment, the classic forms of
management enter in conflict with the democratic process that are the base of the selfmanagement companies.
POMS Production Operations Management Conference – San Francisco USA
April, 5-8, 2002
This text search to rescue the concepts of functioning of this type of organization and point
out the joined difficulties and dilemmas in the present day literature to answer these
questionings considered for the associate-workers of the self-management companies
2. TYPES OF MANAGEMENT SYSTEMS
The management system in the companies not necessarily is become done in the same
way. The approach that is used in the text is of the self-management; but as this term may
be confused with other systems of management, we will appraise to the meaning of each
system (DRULOVIC, 1976; GUILLERM & BOURDET, 1976, MOTTA, 1982; MOTTA
et al, 1987):
Self-management: It is the management that comprises the autonomy of the members of
the company to decide on the destinations, the processes and the results of work. Its
general ideas are:
•
End of the engage;
•
Organization of the work on the basis of the democratic management;
•
Election of self-management commissions;
•
Elimination of the hierarchy;
•
Participation in decisions that concern surplus.
Hetero-management: The opposite of the self-management, that is, the management is
managed by another person, who can be the controlling (Managing, Administrators,
Engineers) and/or by owner(s) of the company. The Hetero-management is the most
common model found in companies.
Participation: It is not a self-managing, restricting the action to the participation of an
existing activity of individual form, where the worker has that to have for in its activities,
interest and persistence. This model inside of a company would have to be of spontaneous
form, where the worker collaborates freely in the decisions of the company, but in the
truth, this participation finishes being imposed for the owner, or directors. The motivation
is obtained with the participation of profits, where the company remunerates the
contribution and persistence of the worker. Inside in this way of management the Heteromanagement prevails.
Co-management: It is a more advanced level of participation, where the participation in
the profits is not alone, which the worker must be interested. It can disclose to the level of
the organization of the work (in most cases) and/or in the level global politician of the
company (co-administration). These types of participation are obtained by motivating the
workers to attenuate the task’s monotony, mobilizing them in a type of auto-organization
in the production’s level.
3. THE SOURCES AND PRINCIPLES OF COOPERATIVISM
For the self-management companies to be based in the principles of cooperativism, it is
necessary to make a description of historic and principles of this. The cooperatives had
appeared have a century more than, from the pioneering experience of Rochdale in
POMS Production Operations Management Conference – San Francisco USA
April, 5-8, 2002
England of 1844, as a reply and opposition of the workers of the textile industry to the
traditional forms of production. Currently, the diverse forms of cooperatives are
considered very important, as much in the developed countries, how much e, mainly, in the
developing countries. The originally principles of the cooperativism had suffered a
reformulation to leave in the International Congress of the International Co-operative
Alliance (ICA) in Vienna (1966), where some principles were established: voluntary
adhesion, a man a vote, interest limited to the capital, to distribute the surplus according to
work, promotion of the education between partners and cooperation between the
cooperatives (AMATO NETO & RUFINO, 2000).
More recently, in the declaration approved in 1995 by ICA, in Manchester - United
Kingdom, had been proposals some modifications that can be summarized in seven
principles: voluntary and opened adhesion; democratic management on the part of the
partners; economic participation, autonomy and independence; education, formation and
information; cooperation between cooperatives; interest for the community. It has,
therefore, in this declaration of Manchester a clear reference the values. The values of the
cooperation if present in the following way: the cooperatives are based on the values of
mutual aid, responsibility, democracy, equality, equity and solidarity. In the tradition of its
founders, the cooperative partners respect the ethical values of honesty, transparency,
responsibility and social vocation (AMATO NETO & RUFINO, 2000).
The peculiarity of the cooperative company is the end of the hegemony of the capital, is
about a company based on the work, in the activity carried through in common, in the
person, who is who carries through the activity. Boarded of this form, the cooperative can
be understood as a human company, in contraposition of the traditional company.
The explication of the ethical values consists in an excellent fact in the declaration of
Manchester, a time that if show opportune to the reference the values such as the
transparency of vital importance in the relations between the partners and the social
responsibility, tied with the new cooperative principle of interest for the community.
1st Principle: Voluntary and Open Membership
Co-operatives are voluntary organizations, open to all persons able to use their services
and willing to accept the responsibilities of membership, without gender, social, racial,
political or religious discrimination.
2nd Principle: Democratic Member Control
Co-operatives are democratic organizations controlled by their members, who actively
participate in setting their policies and making decisions. Men and women serving as
elected representatives are accountable to the membership. In primary co-operatives,
members have equal voting rights (one member, one vote) and co-operatives at other
levels are organized in a democratic manner.
3rd Principle: Member Economic Participation
Members contribute equitably to, and democratically control, the capital of their cooperative. At least part of that capital is usually the common property of the co-operative.
Members usually receive limited compensation, if any, on capital subscribed as a condition
of membership. Members allocate surpluses for any or all of the following purposes:
developing their co-operative, possibly by setting up reserves, part of which at least would
be indivisible; benefiting members in proportion to their transactions with the cooperative; and supporting other activities approved by the membership.
POMS Production Operations Management Conference – San Francisco USA
April, 5-8, 2002
4th Principle: Autonomy and Independence
Co-operatives are autonomous, self-help organizations controlled by their members. If
they enter agreements with other organizations, including governments, or raise capital
from external sources, they do so on terms that ensure democratic control by their
members and maintain their co-operative autonomy.
5th Principle: Education, Training and Information
Co-operatives provide education and training for their members, elected representatives,
managers, and employees so they can contribute effectively to the development of their cooperatives. They inform the general public - particularly young people and opinion leaders
- about the nature and benefits of co-operation.
6th Principle: Co-operation among Co-operatives
Co-operatives serve their members most effectively and strengthen the co-operative
movement by working together through local, national, regional and international
structures.
7th Principle: Concern for Community
Co-operatives work for the sustainable development of their communities through policies
approved by their members.
The comparative picture below searches to evidence the main differences between
cooperative and mercantile company.
Cooperative society
Traditional Company
Man is base.
Capital is base
The partnerworkers are always owner and
The partners sell its products and service to
user of the society.
a mass of consumers.
Each person counts as a vote in the Each stock or quota counts as one vote in
assembly.
the assembly.
The control is democratic.
The control is financial.
It is a society of people that functions in a It is a society of capital that functions in a
democratic way
hierarchical way.
Quotas cannot be transferred to others.
Quotas can be transferred to others.
Remove the intermediate
They are, many times, the intermediates
The results return to the partners in Shares return to partners proportionally to
proportional order of work.
number of stocks.
Opened to the participation of new co- It limits, for times, the amount of
operators.
shareholders
Valorize members and its conditions of Contracts the worker as work force
work and life.
Defends right prices
Defends the biggest possible price.
Promotes integration between cooperatives. Promotes competition among societies.
The commitment is educative, social and The commitment is economic
economic.
There are three basic cooperative models, from which the too much possible variations of
cooperatives are elaborated: The first is the cooperatives specialized in the attendance of
specific economic necessities. The second one is a mixed cooperatives, that match two or
more types of cooperatives, and, finally the integral cooperatives, that is destined to the
POMS Production Operations Management Conference – San Francisco USA
April, 5-8, 2002
attendance of the some specific necessities of its partners and its families, as the case of
the Kibbutzim in Israel.
The models are basically the following ones (AMATO NETO & RUFINO, 2000):
•
Consume model, that if destines, basically, to supply to the associate-users the
foodstuffs and good of personal and domestic utility the prices most advantageous of
than the others companies;
•
Production model, also known as cooperative laborers of production or cooperatives of
workers, the production cooperatives destine themselves, logically, to the autonomous
organization of the workers in the production of an specific good;
•
Credit model, that, in function of the particularities of each region, diverse specific
subtypes present especially in Germany and Italy. Today the most successful
organizations in this segment are people’s bank.
It has, in the current world, and especially in some countries of the Europe, a great number
of successful experiences of the cooperativist movement.
But to mention some of the expressive examples, the case of the Cooperative Complex of
Mondragón can be commented, in the Basque Country (Spain), the Kibbutzim in Israel,
and the cooperatives of production, service, consume and credit of some regions that
compose the call Third Italy. In its set, such cooperatives involve hundreds of thousand of
associates.
4. THE COOPERATIVISM IN BRAZIL
From the historical experiences of cooperativism in Europe in the XIX Century,
cooperatives started to spread all around the world. In Brazil, the first cooperatives
appeared in the end of the XIX Century. Despite the traditional associativist laws in the
Brazilian agricultural field, it was in the sector of urban consumption centers that the first
cooperatives appeared in Brazil.
The pioneer experiences were: the Cooperative Association of Employees of the
Telephonic Company in the city of Limeira, in the State of São Paulo in 1891; the Military
Cooperative of Consume in Rio de Janeiro, at that time Federal District, in 1894; the
Cooperative of Consume of Camaragibe, in Pernambuco, in 1895 and the Cooperative of
Consume of Employees of the Cia. Paulista in the City of Campinas - State of São Paulo -,
in 1887.
It was only later that the cooperativist movement reached the agricultural area, with the
first agricultural cooperatives of Caxias do Sul, in the State it Rio Grande do Sul, in 1902,
and the cooperatives of coffee, cotton, cassava, rice and maize growers, and of dairy
productors in the State of Minas Gerais, from 1907 (PINHO, 1982).
The expansion of the cooperativist experience brought to the creation of some entities that
started to congregate the diverse cooperatives; amongst them it is interesting to recall the
Organization of Brazilian Cooperatives (OCB), as an official representative of the national
cooperative system, created in 1971, and also ANTEAG (National Association of Workers
of Self-management and Shareholding Participation Companies), formed in 1994; Unisol
Cooperative (Union and Solidarity of the Cooperatives of the State of São Paulo) formed
in 1999; ITCP (Technological Incubators of Popular Cooperatives), of university scope,
POMS Production Operations Management Conference – San Francisco USA
April, 5-8, 2002
being the first Incubator formed in 1995, at UFRJ (Federal University of Rio de Janeiro),
and in 1999 at USP (University of São Paulo); ADS (Agency of Solidary Development),
organism created by the CUT (Central Unique of Workers), where the first agency
appeared in 1999.
However, what one realizes, is that there is a great atomization of the single cooperatives
(cooperatives not bond to any entity or federation). Even in the South and southeastern
regions where the performance of the cooperatives is more significant (it corresponds to
65% of the country total) the confederate movement of cooperatives is still inexpressive.
Despite its pioneirism in the urban area, it was in the agricultural sector, through farming
cooperatives, where the cooperativist movement was more spread throughout the XX
century, reaching by the 80’s approximately 75% of the total number of cooperatives in
Brazil, followed by the habitations cooperatives tied to the now extinct National Bank of
Habitation (BNH), with about 15% of the total, and the cooperatives of credit, registered in
the Central Bank, representing the remainder. Another important modality is relative to the
cooperatives of work, that have been growing and taking form in the last years (although
there isn’t yet an explicit legislation to support this type of organization), in all sectors of
the Brazilian economy (metallurgical, textile, agroindustry, civil construction, etc). In this
perspective, there was an increase in the number of cooperatives of work of 24.5% in
1999, and 62% in the last three years (OCB, 2000). This vertiginous growth in the last
years is explained by the current conjuncture of the country, where the austere politics of
the federal government and the process of globalization of the economy has magnified the
index of unemployment in a general form.
5. MODE OF ORGANIZATION IN SELF-MANAGEMENT
COMPANIES
Perhaps the great challenge of initiatives in self-management companies is to conciliate
and to assure its principles of solidarity with its self-sustainment in the market. This last
one demands that these self-management companies are competitive, without having to
follow the rules and to reproduce the traditional model.
We could observe through the research carried (GAIGER, 1999; ANTEAG, 2000,
HOLZMANN, 2000) that workers initiatives for generation of work and income, included
in the Social Economic, are articulating both the entrepreneurial logic that targets results
by means of a planned action, optimization of productive, human and material factors and
the solidary logic, that works as a regulator for the economic rationalization, bringing real
benefits to all workers, where rationality and efficiency is based on the cooperation,
GroupWare potentialities, in favor of themselves.
The self-management companies have as principles: self-management, democracy,
participation, and equality work cooperation, self-sustainment, human development and
social responsibility. However, to the market, it does not matter its internal structure of
management, but the quality and efficiency of its products and services in competitive
terms. Then, for that to occur, the competitive strategies of self-management companies
will have to head towards the adoption of the necessary elements to its subsistence
(technical qualification, productivity, market conquest and capital increasement),
searching the rationality and optimization of the potentialities of each worker to the benefit
of all partner-workers. In this context, the following dichotomy will have to be surpassed:
POMS Production Operations Management Conference – San Francisco USA
April, 5-8, 2002
Management
Common Property
Cooperation
Democracy
Self-management
Planning
X
Qualification
Efficiency
Economic Viability
Quality
When rescuing the question: to control the management or to control the means of
production? We observe that while giving emphasis only to the control of the means of
production the self-management companies lose their identity, because the implementation
of management of traditional market operations as a direct and single form, wounds the
principles of cooperativism, for this would tend to establish a hierarchic level of
subordination and specialization which could exclude the partnerworkers of the participate
decision environment of the company.
Besides the self-management companies growth during the last years, they still show
fragilities related to the organization of their production, because many times they do not
have the capital to maintain its activities, or knowledge on the types of management of
production operations that exist in the market (ANTEAG, 2000). This results in many
difficulties and conflicts to control the production, which many times lead to failure.
6. MODELS OF ENTERPRISE MANAGEMENT: ALTERNATIVES
FOR SELF-MANAGEMENT COMPANIES
All company must think for its subsistence, in the questions related to the safe and
trustworthy taking of decision that involves financial, commercial, accounting and fiscal
questions, human resources, production, supplements and distribution.
The existing models to attend these problems are well know and widely used in the
market, sometimes with the aid of softwares or hardwares. However, what is available is
made for the use of traditional companies, mainly for medium or large companies, or
public institutions.
Apparently there aren’t, in the market, solutions to enterprise management directed
specifically to the self-management companies, mainly to the self-management companies
of production and services, except for the ones in the agricultural sector, for its size and
long presence in the Brazilian market, and this last one does not answer the necessities of
the two previous ones.
The necessity of having a specific solution for this model of company, with an adaptation
of methodology, is because they present organizative, fiscal, legal, accounting, patrimonial
peculiarities etc, because self-management companies do not aim at profit.
There are existing organizations (ITCPs, ANTEAG, ADS, UNISOL etc) that are searching
for adequacy of methodologies of these models for self-management companies, although
POMS Production Operations Management Conference – San Francisco USA
April, 5-8, 2002
still in an exploratory and initial phase, due to lack of professionals studying and searching
in this field and aggravated by the lack of formation of university staff in this field.
The current possible alternative to extend the research of methodology adequacy is to
search to broad the space of these problematic in the university in terms of research and
development, to enlarge the professional staff who works with management in the selfmanagement companies aid organizations, and it’s also necessary that the selfmanagement companies accumulate knowledge in self-management.
In a posterior moment it will be necessary, to integrate the set of acquired background of
self-management companies with the knowledge developed by both the aid organizations
and the professionals involved. This new methodology also involves rethinking
approaches, technologies (information technology, software and hardware equipment),
processes, organizational culture, quality, and efficiency (PEIXOTO, 2000).
7. FINAL CONSIDERATIONS
By the showed panorama the questions related to organizational and production
management in the self-management company scene still need primordially conceptual
solutions which can lead to an effective solution in terms of the daily practice of these
companies.
The research, both theoretical and empiric, has not yet reached in the Brazilian ground
responses capable of guiding (actions to solve) necessities. In the companies' point of
view, the traditional culture of work is an element that makes it difficult, but does not
annul that democratic forms can be daily found.
These experiences can be analyzed in the scope of this new paradigm that searches to
reorganize the models and adequate technologies, without being impositive and
standardized.
Concerning the initial problematic between controlling the management or controlling the
means of production, the more suitable reply is that both controls cannot be carried
through in separate or isolated form. A self-management company, which worried only
about self-management system questions, risks not to fit market requirements, and not
subsisting for much time. On the other hand, by giving emphasis to the management of
organization and production, self-management companies run risk not following the
principles of the cooperativism and ending up transforming themselves into traditional
companies or even in a collapse of the organization.
Thus, what is presented is a false dilemma, for only with full and transparent internal
democracy, with an efficient and rational management, will self-management companies
have chances, both in marketing possibilities and in developing a full model of selfmanagement.
8. BIBLIOGRAPHY
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POMS Production Operations Management Conference – San Francisco USA
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ANTEAG - ASSOCIAÇÃO NACIONAL DE TRABALHADORES DE EMPRESAS DE
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